Encourage Donors to Give Through Donor-Advised Funds
You know I’m all for small monthly gifts, but two years ago I became intrigued with donor-advised funds, especially after I received some DAF-focused email newsletters from Jack Doyle from Amergent. I highly recommend reading them.
Based on Fidelity’s “2020 Giving Report,” the number of donors who have a DAF has almost tripled over the past 10 years, and more and more Millennials have opened an account.
When I did the research to see what was best for me, I was pleasantly surprised that it doesn’t take a huge amount to get a DAF started — $5,000 is the minimum for new funds, and you can feed it from your other investments.
So I established a DAF, the Waasdorp Giving Fund, with Fidelity with an investment of $5,000. It was a good tax decision at the time and a good way to familiarize myself with this type of giving.
What’s also exciting is that it is also possible to make monthly gifts from your DAF.
The amounts are a little higher than the typical $24 a month you see for monthly gifts. It must be at least $50 a month, but this may still be very doable for donors, and it can be that mid-level program you’ve been meaning to grow.
Of course, like anything you do in fundraising, you must plant some seeds. You must let donors know that this is another way they can help. Find the donors who have sent you gifts through their DAF and consider a special message to them.
Here’s one example Jack shared from a P.S. in a thank-you letter.
How about trying a version of the above approach in your thank-you letters going out after this busy giving season. It doesn’t cost you anything to do, and it could generate a minimum of $600 a year.
Do make sure you have your processes in place as a DAF gift is not tax-deductible, so you can’t send the standard thank-you letter. (When you fund or add to the DAF, that’s when the gift is tax-deductible.) Also, not every donor wants to receive a thank-you letter, and sometimes, you don’t know who the donor is. The letter that’s included with the check from the DAF provided indicates the donor’s preference. If you’re outsourcing your data entry, make sure they’re aware of these processes.
Today, I’m making extra gifts to my clients and special organizations that kept me up to date on how my (monthly) gifts have been making a difference.
I sift through my stack of mail and choose those I’d like to give to.
This year, I’m trying something new and will send gifts from my DAF. I already make monthly gifts to 40+ organizations every year from my credit card or bank account, so those haven’t changed. Rather, these donations from my DAF provide an additional way to give and test how organizations follow up.
I think DAFs are here to stay and will continue to grow. Don’t miss the opportunity to let donors know that they can make monthly gifts that way, too! Happy “Hunting.”
Erica Waasdorp is one of the leading experts on monthly giving. She is author of the book "Monthly Giving. The Sleeping Giant." She is the president of A Direct Solution, a company serving nonprofit organizations with fundraising and direct marketing needs, with a focus on monthly giving and appeals.
She just co-authored the "Monthly Giving Starter and Marketing Kit" with Donor Perfect, and she’s working on her next book called "Monthly Giving Made Easy." She regularly blogs and presents on fundraising, appeals and monthly giving—in person and through webinars. She is happy to answer any questions you may have about this great way of improving retention rates for your donors.
Erica has over 30 years of experience in nonprofits and direct response. She helped the nonprofits she works with raise millions of dollars through monthly giving programs. She is also very actively supports organizations with annual fund planning and execution, ranging from copywriting, creative, lists, print and mail execution.
When she’s not working or writing, Erica can be found on the golf course (she’s a straight shooter) or quietly reading a book. And if there’s an event with a live band, she and her husband, Patrick, can be found on the dance floor. She also loves watching British drama on PBS. Erica and Patrick have two step sons and cat, Mientje.